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ASIC, ORIC and other regulators

Obligations to the ACNC

If your charity is registered with the Australian Charities and Not-for-profits Commission (ACNC) it has ongoing obligations to maintain its registration as a charity, including to notify the ACNC of certain changes, report each year and comply with governance standards (except basic religious charities).

Obligations to other government regulators

For some charities, their obligations to the ACNC replace their obligations to other government regulators (for example, charitable companies no longer need to report to Australian Securities and Investments Commission (ASIC)). However, other charities will continue to have obligations to other Commonwealth, state, territory or local government agencies.

The ACNC is working to reduce this regulatory burden for charities. For example, we will accept financial reports submitted to state and territory regulators. We have also entered into a number of agreements with agencies that provide for cooperation and exchange of information, such as with the Tertiary Education Quality and Standards Agency (TEQSA).

Also, the current Commonwealth Grants Rules and Guidelines state that Commonwealth agencies should not seek information from grant applicants and grant recipients (including charities) that is collected by other Commonwealth agencies and is available to them. This includes information collected by the ACNC. Commonwealth agencies can use the ACNC Charity Passport to gather information.

how it operates and what it does for example, specific sectors such as aged care, housing, childcare and education have other reporting requirements, as do charities who receive grants from the government).

Some charities also choose to meet voluntary standards such as codes of conduct or codes of ethical practice set by professional associations, peak bodies or other agencies. For example, charities who are aid and international development organisations may be members of the Australian Council for International Development (ACFID), and follow ACFID’s Code of Conduct.

Taxation

A number of tax or other benefits may be available to charities from Commonwealth, state, territory and local government agencies. Charities must meet certain requirements to receive tax benefits from these government agencies. Charities may also have obligations to collection agencies.

Commonwealth taxes

The Australian Taxation Office (ATO) is responsible for deciding eligibility for Commonwealth charity tax benefits. Charities may be able to apply to the ATO for a different tax benefits including:

income tax exemption and franking credits

goods and services tax (GST) concessions

fringe benefits tax (FBT) rebates and exemptions, and

deductible gift recipient (DGR) status.

The ATO will decide which concessions and benefits a charity will be eligible to receive.

Common Reporting Standard (CRS)

The Organisation for Economic Co-operation and Development (OECD) is implementing a new reporting requirement which will be administered by the ATO – the Common Reporting Standard (CRS). This will take effect from 1 July 2017, and is likely to impact a small number of Australian charities.

The CRS is a single global standard for the collection, reporting and exchange of financial account information on foreign tax residents, and is designed to reduce tax evasion.

The ATO will provide that information to selected overseas tax authorities, and in exchange will receive financial account information on Australian residents from those overseas tax authorities.

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State/territory taxes

Charities may also be eligible to receive exemptions from taxes collected by state and territory governments such as payroll tax, land tax and stamp duty.

Local government concessions

Some local government authorities may offer concessions to charities. For more information, contact the local government authority in the areas where your charity operates.

Legal structures

There are several types of legal structures used by charities. Different obligations apply to each type. Your charity’s legal structure affects many things, such as:

its reporting and governance requirements to the government agency that incorporated (registered) it

its ability to operate outside the state it is registered in without further registration, or

its eligibility for certain tax concessions.

The types listed here are examples of the most common legal structures, but there are others (such as trusts and unincorporated associations). You can read more about legal structure in our information on starting a charity.

Incorporated associations

Most charities have the legal structure of 'incorporated association' and are regulated by state and territory governments. These charities have 'Inc.’ or ‘Incorporated’ at the end of their name. Incorporated associations may have obligations to state or territory government regulators, such as providing annual reports or keeping financial records. Charities must still meet these obligations.

Attention - You need to know! To be registered as a charity with the ACNC your association must have clear and specific objects that set out how it is charitable. This may be more than is required for incorporation.

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Companies

Charities incorporated as companies, registered Australian bodies and foreign companies are registered under the Corporations Act 2001 (Cth) and are regulated by the Australian Securities and Investments Commission (ASIC). Charities are most commonly incorporated as companies limited by guarantee.

Attention:You need to know! Registered charities that are incorporated as companies or registered with ASIC will have many of their notification and reporting obligations to ASIC replaced by obligations to the ACNC.

Indigenous corporations

Charities registered as Aboriginal and Torres Strait Islander corporations are regulated by the Office of the Registrar of Indigenous Corporations (ORIC). Aboriginal and Torres Strait Islander corporations are a particular type of corporation registered according to the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act). These corporations are controlled by Aboriginal and Torres Strait Islander people.

The ACNC and ORIC are working together to try to reduce the number of times Indigenous corporates must report.

Attention:You need to know! Annual reports lodged with ORIC will satisfy your corporation’s reporting obligations to the ACNC until at least 2014–15.

Cooperatives

Some charities are incorporated using the legal structure of ‘cooperative’ and are regulated by state and territory governments. A cooperative is a type of organisation that is owned, controlled and used by its members. There are different kinds of cooperatives.

Fundraising

Charities that undertake activities to raise money (fundraising) may be required to meet obligations (such as applying for a permit or license to fundraise) to a fundraising regulator in the state or territory in which they operate.

Charities that conduct fundraising through gaming activities (such as lotteries or raffles) may have obligations to the gaming regulator in the state or territory they are conducting the activity in.

Streamlining fundraising

The ACNC has liaised with state and territory regulators to look for ways to harmonise these obligations, and some states and territories are looking at legislative change. For example, the Government of South Australia consulted on an Exposure Draft proposing changes to the South Australian incorporated associations and charitable collections legislation to harmonise reporting, and to allow charities to collect donations in South Australia once they are registered with the ACNC. The ACT Government has also considered amendments to its charitable collection legislation to reduce duplicated reporting.

Sector obligations

Non-government schools

Non-government schools currently submit a financial questionnaire to the Department of Education and Training (DET). For the 2014 and 2015 reporting periods, non-government schools do not have to provide financial information to the ACNC directly. We will accept the financial questionnaire as meeting our requirements under the ACNC Act to complete the financial information in the Annual Information Statement (and to lodge a financial report for medium and large charities).

Other laws and obligations

There are a number of other laws that affect the operation of charities covering areas such as employment, trading, occupational health and safety, workers' compensation and anti-discrimination. For example, charities are required to meet obligations under work health and safety legislation and workers' compensation legislation in every state and territory.It is important to note that your obligations may vary between states and territories, if your charity works in more than one.

Some charities may have responsibilities that are specific to their area of work. For example, charities that provide aged care services may need to meet other obligations or hold accreditation as part of working in this field, and charities that work with young people may require their staff and volunteers to undertake a working with children check or police check.

Failing to comply with relevant laws in your state or territory can have serious consequences for your charity. Please refer to your relevant regulatory authority for more information.